SupplyChainOne OP t1_j6klkpu wrote on January 31, 2023 at 12:03 AM

Reply to comment by YoureGrammerIsWorsts in (US) My car loan interest rate is 5.5%, but 15% of my monthly payments go towards interest. Why? by SupplyChainOne

Thank you very much for this breakdown!

I applied my extra payments towards principal.

My loan term is 48mo, forgot to mention that.

Today, I called Hyundai, and they said they could apply the “three months I am over-paid” (91 days) to my principal. Which would bring my account balance to be “current”.

Seems to make sense.. chopping down the principal is best over anything else in the long term.. right? Any reason this ever wouldn’t be the case, if my goal is to pay the least amount of interest on this loan, and as early as possible?

YoureGrammerIsWorsts t1_j6km6gv wrote on January 31, 2023 at 12:07 AM

Absolutely you want to be paying that down towards the premium, but you also never want to miss a payment so I just wanted to make sure you weren't counting on those "91 days ahead" as a fall back option if you can't pay any month